- Economist Clemens Fuest proposes abolishing Germany’s reduced 7% VAT rate and moving to a single 19% VAT rate for all goods and services.
- This would make many items, especially food, public transport, cultural events, and some healthcare items, more expensive, though it’s unclear how much retailers would pass on to consumers.
- To offset the burden on low-income households, the government would give annual credits of about 360 euros to those in need.
- The reform would mainly affect higher-income households and help generate extra revenue to close budget gaps.
- Similar uniform VAT systems already exist in countries like Denmark.
Source: iamexpat.de
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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